here are many things that can kill a business, but one of the most potent is complacency. Business insiders call it the Silent Killer.
Blockbuster comes to mind, but there are others — Polaroid, Sears, Toys“R”Us, Kodak. Sometimes, complacency doesn’t kill a business, but it puts the company on the back foot or on the path to irrelevance.
Most consumers may or may not be familiar with Honeywell, but there’s a chance they interacted with the brand’s round thermostats. Introduced in 1953, the T-86 was gloriously simple. It was designed to function like the dial of a radio (which was popular in the ’50s) and allowed users to turn a round aperture to adjust the temperature in the home. The unit was Honeywell’s first round thermostat, replacing a bulky, rectangular model. My first two apartments, and my first condo and first house had a T-86. In fact, the unit was used in more households around the world than any other model.
The T-86 was so popular that Honeywell probably thought it could sit back and relax, but the company failed to see the growing influence of the smartphone and the burgeoning smart home market. Consequently, when the first smart thermostat hit the market in 2007, it did not come from Honeywell or another legacy manufacturer. The unit came from an unlikely start-up, Ecobee.
Honeywell is still in business, and they now make smart thermostats (as well as many other products), but they have been playing catch-up since 2007. The conversation is dominated by players such as Nest, Ecobee and others.
Hopefully this will not happen to pharmacies in our industry. As it is, things are (relatively) good. Market research firm IBISWorld says the value of the U.S. pharmacy and drug store industry is expected to reach $319.3 billion in 2021 and should see growth of 3.3%. Drug stores in our industry stepped up to fill the need for testing in the early days of COVID-19 and played a vital role in the vaccination effort.
But there is very little time to grow complacent, especially with gathering forces, such as rising drug prices, consumer expectations, disruptive innovation, declining store visits and pharmacy start-ups — like the recent announcement that Highmark and five not-for-profit, mission-driven Blue Cross Blue Shield plans are funding a new company, Evio, to tackle affordability, outcomes and experience with medications. And then there’s Amazon, which, depending on your outlook, is either a threat or merely a paper tiger.
Companies led by innovative and creative CEOs will find ways to adapt, solve the issues and thrive. They have had to adjust and adapt for years, and they surely will have to continue that strategy for the foreseeable future. Companies may even have to start thinking outside of the box. As we have written in these pages, dramatic change is part of the pharmacy business and that change is likely to speed up. So what’s your big idea?